Cromwell EREIT Management Pte. Ltd., as manager of Cromwell European Real Estate Investment Trust (“CEREIT”, and the manager of CEREIT, the “Manager”), wishes to announce that Cromwell EREIT Lux Finco S.à r.l., a wholly-owned subsidiary of CEREIT, acting in respect of its Compartment 1, as borrower (the “Borrower”), has entered into a €157,500,000 sustainability-linked term loan facility (the “Term Loan Facility”).
The mandated lead arrangers for the Term Loan Facility are ING Bank N.V. (“ING”) and Credit Agricole Corporate and Investment Bank (“CACIB”). The original lenders for the Term Loan Facility are ING, CACIB, Banque Européenne du Crédit Mutuel and The Bank of East Asia Limited. ING is also the sustainability advisor in respect of the Term Loan Facility. The Term Loan Facility has a fixed maturity of two years with the option to extend the termination date in years 3 and 4 at the Borrower’s request.
In connection with the Term Loan Facility, Perpetual (Asia) Limited (in its capacity as trustee of CEREIT) (the “CEREIT Trustee”) has entered into a Luxembourg law governed professional payment guarantee with, inter alia, ING, as guarantee agent, to guarantee the Borrower’s obligations under the Term Loan Facility.
The proceeds from the Term Loan Facility are intended to be used to refinance CEREITs existing financial indebtedness. The covenants for the Term Loan Facility are generally similar to those under CEREIT’s existing debt facilities.
The Term Loan Facility has three sustainability-linked key performance indicators (“KPIs“) that are set and measured on an annual basis over a four-year period. These KPIs are:
(a) incremental increase in the numeric overall score of the annual real estate assessment issued by Global Real Estate Sustainability Benchmark (GRESB) for CEREIT
(b) increase in the number of green building certifications achieved, such as BREEAM, LEED or HQE™; and
(c) increase in the proportion (expressed as a percentage) of leases or other agreements with tenants which include green clauses over the total number of leases and other agreements with tenants in CEREIT’s portfolio.
The third KPI target is designed to improve CEREIT's Scope 3 emissions reporting and performance given that green clauses typically require tenant-customers to report their environmental data and collaborate with the landlord to implement initiatives to reduce consumption and GHG emissions.
The debt maturity profile post the refinancing is shown in the chart below:
For the purposes of disclosure under Rule 704(31) of the Listing Manual of the Singapore Exchange Securities Trading Limited (“SGX-ST”), the Term Loan Facility contains conditions where a mandatory prepayment event affecting the entire relevant outstanding Term Loan Facility may occur if any of the following events, among others, takes place (the “Relevant Events”):
(i) the Manager ceases to manage CEREIT; and
(ii) Cromwell Corporation Limited ceases to control the Manager.
For the purposes of the paragraph above, “control” means:
(i) the power (whether by way of ownership of shares, proxy, contract, agency or otherwise) to (which in the case of CEREIT, whether through a trustee as trustee for CEREIT or otherwise):
(a) cast, or control the casting of, more than 50% of the maximum number of votes that might be cast at a general meeting or equivalent of an entity;
(b) appoint or remove all, or the majority, of the directors or other equivalent officers of an entity; or
(c) give directions with respect to the operating and financial policies of an entity with which the directors or other equivalent officers of that entity are obliged to comply; or
(ii) the holding (which in the case of CEREIT, whether through a trustee as trustee for CEREIT or otherwise) beneficially of more than 50% of the issued share capital or equivalent of an entity (excluding any part of that issued share capital or equivalent that carries no right to participate beyond a specified amount in a distribution of either profits or capital).
None of the Relevant Events has occurred as at the date of this announcement. If any Relevant Event occurs, the aggregate level of facilities, debt issues and borrowings that may be affected is approximately €1 billion (assuming the repayment of part of the existing debt facilities using the proceeds of the Term Loan Facility as described above, has occurred).
By Order of the Board
Simon Garing
Executive Director and Chief Executive Officer
